Four Products: Predicting Diffusion (2011)

Abstract

An updated "Four Products" case. This 2011 version includes: sliced peanut butter, artificial dirt for thoroughbred race tracks, interactive tombstones, and stride-changing running shoes. These four products form the basis to assess the drivers of new product adoption. In particular, one of the critical tasks in marketing new innovations is predicting demand and rates of diffusion for those products. And while one can speculate on the scope and rate of diffusion for any given product, it's helpful to compare and contrast diffusion across products. Doing so allows one to focus on the drivers or product characteristics that influence product diffusion, making one product a star and another a dog. Specifically, looking across products allows one to pick up on things that get lost in discussing a single product. Note that this case often gets used with HBS No. 505-075, "Note on Innovation Diffusion: Rogers' Five Factors," which can be distributed along with the case or after the case has been taught.

Related Work

An updated "Four Products" case. This 2014 version includes: raw lobster meat, electric-powered Formula One race cars, a 3D printer for cosmetics, and a "smart" tennis racket.
These four products form the basis to assess the drivers of new product adoption. In particular, one of the critical tasks in the marketing of new innovations is predicting demand and rates of diffusion for those products. And while one can speculate on the scope and rate of diffusion for any given product, it's helpful to compare and contrast diffusion across products. Doing so allows one to focus on the drivers or product characteristics that influence product diffusion, making one product a star and another a dog. Specifically, looking across products allows one to pick up on things that get lost in discussing a single product.

Note that this case often gets used with HBS Note #505-075, "Note on Innovation Diffusion: Rogers' Five Factors," which either can be distributed along with the case or after the case has been taught.

More from the Author

It was mid-December 2016 as Alexandra (Alex) Willis read with satisfaction that The All England Lawn Tennis & Croquet Club (AELTC) had won yet another award for its use of social media to reach its fan base. As the organizer and host of “The Championships, Wimbledon,” the oldest of tennis's four Grand Slams, the AELTC prided itself on tradition and decorum. Widely regarded as the most prestigious professional tennis tournament in the world and contested each year over two weeks in late June and early July, Wimbledon, in many ways, had changed little over the years. Its showcase venue—the 15,000 seat “Centre Court,” complete with a “Royal Box”—was built in 1926. Slazenger had been the official and only supplier of tennis balls since 1902. A strictly enforced ban on any player clothing other than white dated back to the 1800s. And, whereas other tournaments referred to their Men’s and Women’s Championships, at Wimbledon, these events were referred to as the Gentlemen’s and Ladies’ Championships. It was against this “steeped-in-tradition” background that Willis, hired by Wimbledon in 2012 and promoted to Head of Digital and Content in 2015, had to figure out the proper role for digital and social media at Wimbledon. The motivation behind the push into digital was one of communicating and engaging with fans and potential fans around the world, as noted by Richard Lewis, Chief Executive of the AELTC.

One job of product managers, marketers, strategic planners, and other corporate executives is to predict what the demand will be for a new product. This task is easier for certain classes of new products than for others. For new consumer package goods, for instance, one can look at past product rollouts, one can look at similar products currently in the marketplace, or one can do test markets—selling the product in a small section of the country to assess consumer acceptance. Quite often, for new products that represent incremental variations or improvements over existing products, marketers do a pretty good job of understanding how that product will be adopted in the marketplace. This is not to say that managers always get it right, as has been made evidently clear in the case of New Coke, dry beers, and the Edsel. However, more often than not, managers of incremental new products predict demand within the right order of magnitude.

Companies have long tried to enhance consumers’ perceptions of their firms and the products they sell in a variety of ways. Such efforts include the development of a brand image that the public views favorably, as in the case of Apple. It extends to the development of memorable advertising, as with Nike's “Just Do it” campaign. It includes associations with famous individuals (e.g., Michael Jordan) or with charitable entities (e.g., the Ronald McDonald House). And it encompasses efforts to be environmentally conscious, as when Starbucks buys from sustainable sources or when S’well encourages the purchase of its reusable water bottle to reduce the use of plastic drinking containers.